Economy

MPs step into traders’ row with the taxman

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Kiharu MP Ndindi Nyoro (right) leads MPs from Central Kenya in addressing the media on October 17, 2018 at parliament buildings while calling on the government to protect local traders. Photo | NMG

Central Kenya MPs yesterday came out with guns blazing at the Kenya Revenue Authority (KRA) over the agency’s alleged refusal to unconditionally release small traders’ goods that have been lying at various ports for the past four months.

The 10 MPs, including Kiharu MP Dindi Nyoro, accused the multi-agency team comprising KRA, Kenya Bureau of Standards (Kebs) and the Anti-Counterfeit Agency, of bending government policies to favour well-established traders at the expense of small ones.

“The government must clearly define what counterfeit goods are and come up with standards that cut across. Our small business people are becoming targets of rogue law enforcers,” Mr Nyoro said.

The MPs spoke even as it emerged that some of the containers have substandard, fake or illegal goods and their owners are facing criminal investigations.

A status report on the containers that were subjected to relaxed checks following KRA’s August amnesty shows that about half of the 217 containers that were held are still lying at the port and some have failed the clearance test.

Deputy head of public service Wanyama Musiambo, who is leading the multi-agency team in fighting counterfeit goods, said the clearance process could not be finished at once because the traders had submitted a list of the 483 containers in two batches made up of 217 and 266 containers.

“To get the promised waiver and for the government to pay the demurrage costs, we needed to get the Treasury’s approval,” Mr Musiambo said, adding that the government has spent a “substantial” amount of money on the waiver but that did not mean releasing the goods without following the port procedures.

Documents seen by the Business Daily show that by close of business Monday, KRA had cleared and released 106 of the initial 217 containers.

But 28 of the containers are being held for criminal investigations, 33 are still at the port over tax arrears while 25 have not been declared by their owners. Others did not have all the required documents.

In the list of containers being held for criminal investigations are 12 containers belonging to Gendipe Enterprises and Rupai Trading Limited that were shipped in by Landmark Freight Services Limited, an agency that is in court for importing 92,000 bags of brown sugar from Brazil that are unfit for consumption.

Anne Nyokabi, the chair of Nairobi Importers and Small Traders Association (Nista), however maintained that all goods should be declared fit for clearance despite KRA’s findings.

“Our work is to buy and sell. It is the government that issues certificate of conformity at the time goods are being dispatched to the country from the source,” she argued.

Yesterday, the MPs claimed that a lobby group of well-established traders had consolidated themselves into a cartel that is erecting barriers in the way of small traders to suppress competition.

Between May and early this month, the multi-agency team says it has confiscated illicit and counterfeit goods worth Sh8.5 billion, pointing to a rampant loss in tax revenues as well as health risks associated with consumption of substandard goods.

In May, President Uhuru Kenyatta told Parliament that Kenya loses over Sh30 billion in revenue annually as a result of tax evasion, counterfeiting and trade in unlicensed products.